[ One of Yahoo's winners: original shows like "The Daily Ticker" on Yahoo Finance. ]

By Jason Calacanis

A lot of folks have asked me about Yahoo and what I would do if I were CEO [ see the discussion on This Week in Startups. ]

That is, of course, comical and academic because boards don’t put wildcard, product-driven executives in charge of large assets -- especially when the assets are struggling.

Who do they put in charge of large troubled assets? Sales folks like Steve Ballmer and Tim Armstrong, and operational experts like Carol Bartz. Why? It’s a safe choice. Your downside is protected because they are guaranteed to stabilize the bottom line with two tactics:

a) cutting costsb) incrementally increasing sales

Say what you want about Carol Bartz, but for what she lacked in launching meaningful products [ see here ], she did cut expenses and make Yahoo run slightly better. Tim Armstrong might not be able to keep control of the Aol ship or launch amazing new products, but he has built a killer M&A machine and a killer sales offering, and he's doing a better job concerting with Madison Avenue than has happened since Aol's glory days.

The downside of protection comes with a big cost: your upside is capped due to a lack of innovation.

Folks like Tim and Carol spend 80% of their time focused on deals, operations and sales -- and maybe 20% on product. Maybe.

I mean, how much time does a Tim Armstrong have to think about the next 20 product features if he is trying to clean up the train wreck around TechCrunch, sell off Aol’s access business and merge with Yahoo?

[ Side note: Yahoo and Aol merging is a worse idea than Aol and TimeWarner merging. If you can’t keep one email system best of breed, you're not going to be able to manage merging two dysfunctional systems into a market leader. Said another way, two dysfunctional individuals don’t solve their problems by getting married and making babies. ]

Paradoxically, Yahoo desperately needs a product-driven CEO because its future is based on three things it kind of sucks at: video, social and mobile.

Now, I love Tim and Carol actually. They are awesome executives, but I actually think they both should play the Sheryl Sandberg and Tim Cook president roles next to product-driven CEOs. Seriously, Sheryl is performing at a much higher level at Facebook than Carol did or Tim is, and she doesn’t have a problem with the “number two” slot -- she just cares about winning and having a killer team.

This is what boards need to learn: top slot = product person, second slot = operations person. Not the other way around.

You have to gamble with a product maniac like Larry Page, Steve Jobs, Mark Zuckerberg, Mark Pincus or Sergey Brin in our business.

As my Asian gambling buddies like to remind me: “No gamble, no future! No gamboule, No foootour Jaeeesun!”

Assessing Yahoo’s Options

Part of knowing what to do is knowing what not to do. Here are the spaces where Yahoo is going to have a hard time competing:

1. Mobile OS: You're not going to be able to catch up to the Android or iOS platforms. If Palm, Microsoft and Blackberry/RIM are having a hard time with these two "instant juggernauts" what chance does Y! have? Zero. Move on. Note: I’m not talking about mobile apps here -- those would be huge and I’m going to address this point a little further down the page.

2. Search: Y! sold the rights to search for a decade. Sadly, search is off the table in terms of growth and innovation. In fact, selling search to Bing will go down as one of the worst ideas in portal history (seconded only to Yahoo giving their search over to Google a decade ago).

3. Hardware: Obviously Yahoo has no ability to compete in making a tablet or any physical device. Sure they made an AWESOME keyboard back in the day, but that was a long time ago. So, in case anyone has any delusions of Yahoo making a run at Apple, HTC, Amazon's Kindle, etc., let’s just forget it now.

So, what assets does Y! have that are still loved, have significant scale and/or are actually decent products?

1. CONTENT: Yahoo News (51M U.S. uniques in July 2011), Yahoo Finance (30M) and Yahoo Sports (36M) are all awesome products even though they have not received a face-lift in years and years. +Richard Rosenblatt of Demand Media and +Tim Armstrong over at Aol are attacking the content space aggressively and they're trying to best Yahoo's offerings. Yahoo’s Associated Content acquisition was one of its best moves, as the top of their contributor base actually produces quality products worthy of being linked to from Y’s front page.

2. Yahoo Mail (100M active users reported in August 2011) is still a decent product only bested by Gmail. It has a huge global footprint.

3. Yahoo Answers (56.6M U.S. uniques in July 2011) is hated and has garbage content -- but it does have massive global scale.

4. Yahoo Games were the gold standard for a time (53M global uniques in May 2007, 12.5M U.S. uniques in July 2011), but Facebook/Zynga have taken that mantle now. Still, Yahoo's scale and history in games is very real.

5. Yahoo Video (3.7M U.S. uniques in July 2011): Yahoo users are content consumers and Yahoo has an AWESOME video franchise over at Yahoo Finance with +Henry Blodget. It's actually better than CNBC more often than not (sorry +Maria Bartiromo and +Herb Greenberg), because they are willing and able to take deeper dives than CNBC on specific topics.

6. Yahoo's display advertising products (which generated over $1B in revenue in the first six months of 2011) are valued by advertisers.

7. Yahoo's Flickr (6B photos as of August 2011) is amazing despite being ignored for the better part of a decade.

All of these are content and social products, and they are all exploding on mobile devices.

The future is three things: mobile, social and video.

I’m so convinced of this that I pivoted Mahalo from human-powered search to make educational videos and (iPad) apps. Yahoo's assets are ripe for mobilization, socialization and video.

Conclusion

What this all tells me is that Yahoo's best future is as the #1 news source in the business, and the company is an awesome content platform.

If I were running Yahoo, I would set our goal at doubling the time spent consuming and interacting with content, and growing the number of people doing so by 25% a year.

Yahoo Buzz, a Digg-like service launched in 2008 that Yahoo shut down in April, was an awesome product and publishers were really drawn to it. Yahoo also shut down a video stream service called Yahoo Live and ankled its YouTube competitor.

These are three products with awesome potential that Yahoo should immediately bring back, evolve and iterate on.

Yahoo is one of three companies capable of competing with YouTube on a global basis (Microsoft and Facebook are the only other two who could really) and they gave up under Bartz. Huge, huge mistake.

Yahoo needs to focus on pulling in as much content as possible and creating as much community and participation around it as possible in my opinion.

Third, Yahoo should make every video and content site massively mobile. Flickr, Yahoo Video, Yahoo News, Yahoo Finance and Yahoo Mail should all have amazing iPad/iPhone and Android versions. The Yahoo Finance app for iPhone is horrible -- start over.

Look at this usage pattern:

-- I spend 5x as much time on Yahoo Finance’s website now than five years ago because of their original videos (Daily Ticker, Financially Fit and Breakout). They are seriously better than most CNBC shows. Yahoo should just go ahead and buy Business Insider and put Henry in charge of news and finance -- he would crush it.

-- I would spend another 2-3x if there were a community around those features (social). Right now their are no video responses, comments, votes or socialization around these video objects -- huge waste!

-- I would spend another 2-3x if Yahoo had a killer iPad app (mobile). Their current app is just a sad, inferior skin of their website.

Yahoo could do that across every content vertical with their current assets by shutting down more side projects and hiring the top content creators in the world.

Advertisers would have no choice but to back up the brinks trucks due to Yahoo’s footprint.

Yahoo's recipe for success is three simple things: video + social + mobile.

Right about I’m betting that Jon Miller (chief digital officer at News Corp) or Ross Levinsohn (Yahoo EVP of the Americas) will become CEO and President of Yahoo, because I know we’re all simpatico on these ideas -- and that these two fine executives could actually execute on the roadmap above.

Yahoo could easily double users' time on the site with video, mobile and social and be considered a huge winner. It’s just going to take a massive amount of product focus and eight quarters of ignoring the stock price, revenue and earnings.

Piece of cake... provided you know how to control costs making awesome video content and mobile apps -- which Yahoo doesn't but could with a strategic acquisition and hire or two. Just sayin’ :-) .